Russian President, Vladimir Putin, has signed an order that now makes it compulsory for government officials to declare their digital assets. This requires the workers, as well as their spouses and children to be open about the cryptocurrency assets that they hold.
The order states that the workers have to say where they purchased the digital currencies and what their value is. The order also applies to people who want a working position with the government. In addition to the declaration, the workers have to provide details of the investment platforms that they make use of as well as the state registration number and taxpayer number of the business.
All the details are expected to be provided before June 30, 2021. This follows a previous order that gives cryptocurrencies a legal status in Russia, although they can not be used as means of payment yet.
This move clearly aims to track the crypto assets of Russian government workers as well as the legitimacy of their investment transactions. Although the cryptocurrency sector in Nigeria doesn’t have clear regulations yet, a move similar to that of Russia’s government can not be ruled out for from being put into place in Nigeria.
Why would government want its staff to declare their digital assets?
Governments want to keep the financial transactions of public workers as transparent as possible. This prevents misappropriation of funds as well as embezzlement. In Nigeria particularly, it is not uncommon for government officials to be accused of diverting funds.
A recent example is the case of the then Acting Managing Director of the Niger Delta Development Commission (NDDC), Daniel Pondei, who fainted while he was being probed for diverting government funds. The need to track where the money is going to is therefore important. With the advances in technology, it has become equally important to ascertain the moment when it changes form from fiat money to digital money.
Can the Nigerian government ask workers to declare their digital assets?
Currently, government workers are expected to declare their assets. The Code of Conduct Bureau introduced an Online Assets Declaration System (OADS) for public servants. The OADS will equip government workers to declare their assets from their houses or offices as at when necessary in order to cut off corrupt practices.
The regulations for declaring assets do not cover digital assets as of the moment. The assets required are those owned by public workers within and outside the country at the time of filling the form. Digital assets are not mentioned or classified under any category, and cryptocurrency is not mentioned anywhere.
A statement issued by the Securities and Exchange Commission (SEC) in September highlights that regulations will be coming into the cryptocurrency space. Although crypto assets are not issued or guaranteed by any jurisdiction in Nigeria, the SEC’s stand is that crypto-assets that are used as part of any business activities by an individual or organization must be registered and follow its guidelines.
This has no bearing on public workers owning cryptocurrencies. However, with the CCB using modern technologies to get workers to declare their assets, it is possible that cryptocurrencies belonging to government officials may find a place on the OADS form.
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